Nigeria’s crude oil production remains below par as oil prices drop

Nigeria’s crude oil production has remained below par, decreasing to an average of 937,766 barrels per day (bpd) in September.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said this in its latest crude oil and condensate production data for September 2022.

The production figure is 3.56 percent or 34,628 bpd lower compared to the August 2022 output at 972,394 bpd.

It is also lower than the 1.8 million bpd production quota set by the Organisation of Petroleum Exporting Countries (OPEC).

According to NUPRC’s data, with the addition of condensate, oil output plunged to a total of 1.14 million bpd from 1.18 million posted last month.

Condensate is a mixture of light liquid hydrocarbons, similar to a light (high API) crude oil — usually separated out of a natural gas stream at the point of production (field separation) when the temperature and pressure of the gas are dropped to atmospheric conditions.

In January, February, March, April, and May, the country’s crude oil production averaged 1.39 million bpd, 1.25 million bpd, 1.24 million bpd, 1.22 million bpd, and 1.02 million bpd, respectively.

READ ALSO: Oil prices fall below $95 a barrel amid fears of global recession

Also, crude oil production averaged 1.16 million bpd and 1.08 million bpd in June and July, respectively.

Meanwhile, oil prices dropped marginally on Monday after jumping by almost $10 per barrel in the last week on the back of a larger-than-expected OPEC production cut, fueling reports of likely profit-taking by traders.

Brent crude had dropped by 0.68 per cent to trade at $97.24 per barrel while the American WTI dropped by 0.515 to trade at $92.13 per barrel, according to oilprice.com.

However, there are now fears of a deep recession across some major European countries, caused mainly by an energy crunch that started last year and is serving to constrain oil prices from rising too high.

Despite several latest price forecasts by some financial institutions, most of which puts Brent crude at above $100 per barrel before the end of 2022, many others predict a demand drop in the immediate future.

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Recall that on October 5, 2022, the full OPEC group had agreed to cut crude oil production by its members by 2 million barrels per day from the month of November 2022.

The decision was taken after the 45th meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 33rd OPEC and Non-OPEC Ministerial meeting on Wednesday, October 5, 2022, at the OPEC Secretariat in Vienna, Austria.

The output cut is coming on the heels of the uncertainty that surrounds the global economy and oil market outlooks and the need to enhance the long-term guidance for the oil market.

The production cut by OPEC had led to panic within the United States Government with White House officials and representatives meeting with influential members of the group from going ahead with such a decision.